2019 ETF Research Report, ETF Market Update

Least popular ETFs

Least popular ETFs by examining the largest decreases in size and flows over the past year.

The biggest FUM losers were mixed across different sectors including currency, global shares and Australian shares.

Worst ETFs by funds under management (FUM) growth


Political uncertainty in the Eurozone (e.g. Brexit) and a more dovish Fed pausing interest rate increases (which puts downward pressure on the US Dollar) can explain the decreases we saw in the iShares S&P Europe ETF (IEU) and the BetaShares U.S Dollar ETF (USD) respectively.

Surprisingly, we saw a decrease in FUM for the BetaShares S&P/ASX 200 Resources Sector ETF (QRE), despite a positive year of performance (up 28%) for resources.

The BetaShares Australia Top 20 Equity Yield Max Fund (YMAX) rounds out the bottom 5 falls in FUM as the high dividend ETF did not keep pace with other yielding strategies, potentially due to investors losing appetite for active strategies and a preference for the broad market ETFs.

YMAX returned 7.6% over the past year whereas the average passive rules-based Australia Share yield ETF returned 9.4%.

Worst ETFs by flows


The introduction of A200 has put pressure on higher cost ETFs tracking the Australian market. A200’s launch resulted in outflows from two of the dominant ETFs that track the ASX 200, being STW and IOZ.

The Banking Royal Commission had minimal impact on inflows into the Financial Sector ETFs – the VanEck Vectors Australian Banks ETF (MVB), SPDR S&P/ASX 200 Financials EX A-REIT Fund (OZF) and the BetaShares Australian Financials Sector ETF (QFN). FUM in these products actually increased by an average of 44%.

Performance of S&P/ASX 200 Financials ex-AREIT (including dividends) was down 7% from the start of the Royal Commision hearings in March 2018 till it concluded in November 2018. The Index had a surprise rally of 5% on the back of the report being released in February 2019, as the recommendations were not as strongly feared.

Bottom 5 ETFs by decreases in FUM

ASX CodeETF NameFUM ($m) Mar’19Annual change in FUM ($m)Annual % Change in FUM
USDBetaShares U.S Dollar ETF350-125-26%
IEUiShares S&P Europe ETF688-119-15%
IOZiShares Core S&P/ASX 200 ETF1,142-114-9%
QREBetaShares S&P/ASX 200 Resources Sector ETF 32-86-73%
YMAXBetaShares Australia Top20 Equity Yield Max Fund307-75-20%

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Investment Associate

Marc has over 5 years experience in the financials services industry having previously worked for Morgan Stanley, AMP and KPMG. He holds a Bachelor of Business (Finance/Accounting) from the University of Technology Sydney (UTS), and has completed his Chartered Financial Analyst (CFA) Level 1.

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